Gérard Colombat via flickr
The European Commission (EC) has released new proposals requiring major international companies operating in the EU to disclose data on income and taxes paid in every country of the Union - both separately for the "suspicious" jurisdictions, and altogether for the remaining countries. The regulation affects all companies and banks with revenue of more than € 750 million, which operate through a permanent establishment in the EU. There is about 6 thousand of such companies, including 2 thousand of those in the EU. The novation’s approval requires support of the European Parliament and a qualified majority of the members of the European Council.
According to the European Parliament, EU annually loses about € 50-70 billion on the corporate tax underpayments. The companies will be required to publish reports on their websites, keep the documents for at least five years, and transfer the information to the commercial EU register. The corporations will need to specify details about their activities, number of employees, total revenue, including turnover between units within the group, the profit before tax, the amount of paid and declared taxes, and accumulated profit. The lawmakers are also planning to create a single EU list of offshore companies " jurisdictions not sharing information."
Requirements on reporting is not new by itself since heads of the OECD and the G20 member countries approved recommendations for disclosure in November 2015. The new proposals are made within a plan to combat erosion of the tax base and the movement of profits (BEPS). The project’s basic idea is to pay taxes at the place where income is received. Groups in The UK, the Netherlands and Ireland will start reporting in 2016.
source: bna.com
According to the European Parliament, EU annually loses about € 50-70 billion on the corporate tax underpayments. The companies will be required to publish reports on their websites, keep the documents for at least five years, and transfer the information to the commercial EU register. The corporations will need to specify details about their activities, number of employees, total revenue, including turnover between units within the group, the profit before tax, the amount of paid and declared taxes, and accumulated profit. The lawmakers are also planning to create a single EU list of offshore companies " jurisdictions not sharing information."
Requirements on reporting is not new by itself since heads of the OECD and the G20 member countries approved recommendations for disclosure in November 2015. The new proposals are made within a plan to combat erosion of the tax base and the movement of profits (BEPS). The project’s basic idea is to pay taxes at the place where income is received. Groups in The UK, the Netherlands and Ireland will start reporting in 2016.
source: bna.com